Can green industrial policy promote green innovation in heavily polluting enterprises? Evidence from China

Although synergies of economic and environmental development are a central global concern, there has been limited empirical research on the effectiveness of green industrial policy at the enterprise level in developing countries. This article demonstrates the impact of China's green industrial policy on green innovation based on evidence related to Chinese listed companies in heavily polluting industries against the backdrop of China's Five-Year Plans context from 2011 to 2020. It finds that green industrial policy promotes green innovation among enterprises through the mediating roles of government subsidies and bank loans. Notably, this effect is more significant for enterprises that are state-owned and located in Eastern China. The findings offer guidance for developing countries on how to implement green industrial policy to stimulate green innovation.